The US central bank is expected to keep interest rates unchanged this week, while expressing a more dovish policy stance that could pave the way for interest rate cuts over the coming months. Rising expectations over a Fed rate cut is testing the resilience of the DXY, whereby a Fed statement that’s interpreted as more dovish compared to market expectations could see the DXY unwinding its recent gains.
EURUSD tests 1.12 support level
The DXY was recently given a boost by the ailing Euro, following ECB President Mario Draghi’s dovish guidance towards potentially more policy stimulus for the Eurozone. EURUSD’s stay above the 1.13 psychological level proved short-lived, as it now tests the 1.12 support level. However, should the Fed prepare markets for a potential US interest rate cut, the Dollar’s softness may allow the Euro to pare recent losses and open a path back up to 1.13.
GBPUSD opening path towards 1.25
The Pound has been weighed down by Brexit uncertainties and political turmoil, as the UK Conservative party’s hunt for a new leader is underway. With GBPUSD opening a path towards the 1.25 psychological level, Sterling bears have clearly made their presence felt in the markets, as GBPUSD continues to hunt for a stronger floor. While a new UK Prime Minister is appointed by end-July may remove a layer of uncertainty over the Pound, Brexit’s uncertain path remains a major overhang over GBPUSD, which could mute future attempts at carving out gains.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.
This article was originally posted on FX Empire
More From FXEMPIRE:
- E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – June 20, 2019 Forecast
- GBP/USD Price Forecast – The British pound tests major resistance
- U.S. Dollar Index Futures (DX) Technical Analysis – June 20, 2019 Forecast
- Gold Price Prediction – Prices Surge and Continue to Break Out Reaching 5-year Highs
- Gold Price Forecast – Gold markets explode
- Crude Oil Price Forecast – Crude oil markets explode to the upside